Delhi HC: Tests to determine when a deed can be treated as release deed or relinquishment deed

From a reading of the above judgments, the test to determine whether an instrument can be considered as a Release/Relinquishment Deed can be summarized as under:-

a. In determining whether the document is a release or Gift/Conveyance, the nomenclature used to describe the document or the language which the party may choose to employ in framing the document, is not a decisive factor. What is decisive is the actual character of the transaction intended by the executants;

b. Determination of the nature of the document is not a pure question of law;

c. Where a co-owner renounced his right in a property in favour of the other co-owner, mere use of word like 'consideration' and 'transfer' would not affect the true character of the transaction;

d. What is intended by a Release Deed is the relinquishment of the right of the co-owner;

e. Co-ownership need not be only through inheritance, but can also be through purchase;

f. Where the relinquishment of the right by the co-owner is only in favour of one of the co-owner and not against all, the document would be one of Gift/Conveyance and not of "release".

THE HIGH COURT OF DELHI

W.P. (C) 9193/2019 and 3560/2018

Decided On: 20.05.2020

Tripta Kaushik Vs. Sub Registrar VI-A, Delhi and Ors.

Hon'ble Judges/Coram:

Navin Chawla, J.

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When deed assigning property at the time of dissolution of partnership firm is liable to be stamped?

The essential distinction hence is in looking at whether there is an allotment of the surplus assets, on dissolution, amongst the partners. If that is so, the partners who owned the assets together, during the existence of the partnership, had a right to share in the business in accordance with their shares. On dissolution and allotment of the remaining assets, even if there is immovable property, each goes with his share, not creating any new right. But when there is an assignment in favour of one or other and consideration is passed then it creates new rights on the immovable property. A deed creating such rights would have to be registered compulsorily and the creation of such right is a "release" under Article 48(b) to be stamped accordingly.

Equivalent Citation: 2015 (3) KHC 752

IN THE HIGH COURT OF KERALA

W.P. (C) No. 34751 of 2008

Decided On: 22.06.2015

Vinayakrishnan M.C. Vs.Commissioner for Land Revenue and Ors.

Hon'ble Judges/Coram:K. Vinod Chandran, J.

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Leading Supreme Court Judgment on release deed

 We may now consider the submission of Mr. Chandrasekhar as to what is meant by `release'. Reliance has been placed on De'Souza's Conveyancing, page 1075, wherein it has been stated:

A deed of release does not create title. A release may be drafted in the same form as a deed of transfer or simply as a deed poll or a deed to which both parties may join stating the circumstances under which the release is based. Either the monetary consideration or "the premises", i.e., facts in consideration of which the release is made shall be stated.

42. Our attention has also been drawn to essentials of `release' from the said treatise, which are as under:

(i) Full recitals of the origin of the claim, which form the most important part;

(ii) knowledge of the releaser about the claim, intended to be released;

(iii) words and expressions sufficiently clear to convey the intention of the releaser to discharge the right or the claim.

43. A deed of `release' for a consideration is a transaction. When, thus, a release is made for consideration, the particulars of consideration and other particulars which are required to be averred in the deed being essential elements thereof. Relinquishment of a property by a sister in favour of her brother for a consideration or absence of it, stands on a different footing. Section 25 of the Indian Contract Act must be read and construed having regard to the fact situation obtaining in the cases.

Supreme Court of India

Ranganayakamma And Anr. vs K.S. Prakash (D) By L.Rs. And Ors. on 16 May, 2008

Bench: S.B. Sinha, Lokeshwar Singh Panta

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